Centel Wins Round Against Hostile Suitors

Centel Corp. apparently won a victory over a dissident group led by Asher B. Edelman and Metro Mobile CTS Inc. Chairman George Lindemann in a company election dealing with Centel’s board makeup and anti-takeover measures, sources close to the company said Tuesday.

By at least a 3-1 margin, the large telecommunications concern’s shareholders upheld management in its plan to eliminate cumulative voting of board members and by an even greater margin approved the election of three management-proposed directors, the sources said.

A vote in favor of the dissident group would have furthered their plans to buy the diversified telecommunications company in a proposed $2.7-billion deal and then sell it off in pieces.

Centel Chairman John Frazee stopped short of claiming victory but said he was confident that management won overwhelming support from shareholders. The result of the vote is to be announced July 8, when shareholders reconvene a meeting that was held Tuesday for the proxy election.

Burton Lehman, an associate of the investor group led by the New York-based Edelman and Lindemann, said he was confident that shareholders had voted to retain cumulative voting in the directors elections but made no prediction as to how the group fared.

Selling Units

In cumulative voting, shareholders are allowed to vote each share for every board opening, but Centel’s management proposed limiting each share to one board vote.

If Centel managers won, it would be the second major victory of a company management over a group of insurgents this month. In a similar vote in which a corporate raider waged a takeover fight by seeking board representation, investor Carl C. Icahn lost a bid to unseat Texaco’s board designees.

Frazee said the vote appeared to “support implementation of our business plan,” which includes a restructuring and selling off a large business systems unit. The plan was aimed at deflecting the $65-a-share takeover bid by the dissident group.

The company Tuesday also announced an expanded stock repurchase of up to a total of 5 million shares, expanding a half-completed 1.5-million-share repurchase program.

Sources said preliminary indications are that management received roughly 26 million votes to eliminate cumulative voting, of the roughly 21.7 million needed. The three-member slate of directors proposed by management won an even larger share of the vote, the sources said.

Elimination of cumulative voting had been a key concern of management in its effort to keep dissidents from winning any seats on the Centel board. By eliminating cumulative voting, Centel shareholders would effectively reduce the influence of minority factions in seeking board seats.

Frazee said Centel management had never considered paying greenmail to the dissident group and he added that he cannot conceive of selling part of Centel’s cellular business to Lindemann’s Metrol Mobile unless it would be done for the right business reasons.

“Our board’s position is that our company is not for sale in whole or in part,” he said.